Requirements to Open a Money Transfer Company

Posted by Dayam Ali Aslam on February 11th, 2021

What are the requirements to start a money transfer company?

Although the requirements to open money transfer companies vary from state to state and the best known are Western Union and Paypal, there are many more and you can start your own company if you meet minimum requirements that are generally the most common between states like:

1. Establish your business on a physical geographic site.

2. Have a fixed capital.

3. Have a surety bond.

Anyway, you can start your business in a fixed physical space within your city or establish it online or combine these two options and offer transfers in your physical space and online at the same time.

License for money transfer companies

In addition to meeting the requirements that the government of your state requires, you may need to obtain a money transfer license, with which you will pay the application fees corresponding to each of them, as each state establishes its own fees, but you can check them in the National Association of Money Transmitters.

The Business Register

You must obtain and submit the application with the form to FinCEN 2017 directing it to the Financial Crimes Enforcement Network, the Treasury Department agency and within 180 days from the date you established the business.

YOU MUST ALSO CREATE A MERCHANT BANK ACCOUNT IN THE BANK OF YOUR CHOICE, AS IT WILL ALLOW YOU TO ACCEPT DEBIT AND CREDIT CARD PAYMENTS AND ALLOWS YOU TO DEPOSIT PAYMENTS AND RECOVER FUNDS FROM YOUR CLIENTS.

Only open the business once all applications have been approved and you have the licenses with you.

Companies that send money from the United States to Mexico

There are many options with which you have to send money from the United States to Mexico and you will find a lot of competition since it is the destination that receives the largest number of transfers.

For this reason, you must compare the location for the recipient to withdraw the money once re-transferred, the speed in the delivery of the money and the cost, for example, Western Union and Money Gram are two viable options, but how they work:

Step 1: Browse through the websites of both money transfer companies to find the closest agent and specify the location in Mexico, then take the money you want to send along with the identification to the people you have chosen.

Although the method of sending money can vary from company to company, it will generally be as simple as completing a few documents, delivering the money in cash or by credit card, paying the Northwest fee, and calling the recipient with instructions on how to receive the money.

To access Money Gram services in Mexico you can access sites such as Superama, Suburbia, Bodega Aurrera, Caja Libertad, Intermex, Calimax, FAMA, Soriana, Coppel and Wal-Mart México.

Step 2: Log into your online payment processing account. If you use services such as Pyza, Amazon Payments or Paypal, linked to your credit card bank account, you will not have problems.

Pay pal has a service that operates with a Mexican version, so the recipient will need an account with the payment processor they use, but they can still register for free.

Step 3: Contact your bank of origin to organize a bank transfer to the person you want to receive the money, by phone or from home banking if you have registered.

However, if you are outside the country it is possible that your bank has security restrictions that will limit the ability to make the transfer.

What are the best money transfer companies?

In addition to Western Union, there are many other money transfer company options, such as:

OFX: It is an online provider with low exchange margins and no upfront fees, which is why the delivery of cash is a cheap service. It is a digital transfer platform with a low margin of exchange rates from US dollars to Mexican pesos.

You can also set up rate alerts to send money when the rate becomes more favourable for you. Delivery takes 1 to 3 business days but has a minimum limit of $ 150 to send and transfers require bank accounts to send and receive money.

Remitly: It is also an online provider with low costs and fast cash delivery.

Money Gram: It is a traditional transfer provider that offers you deliveries in a few hours and cash withdrawals in minutes.

Xoom: It belongs to a large network of online providers that delivers fast money in a few minutes.

Although the exchange rate is among the most expensive, the speed of delivery and other characteristics make up for it, because from the website or the Xoom mobile application money can be sent to a recipient's account in the main Mexican banks and the team Customer service is available 24 hours a day, 365 days a year and they speak in Spanish.

Western Union: In this case, transfers for cash withdrawals arrive in minutes while sending to bank accounts can take 4 business days, but you can send money online or with the mobile application and pay with a bank account, debit card or credit from the United States or from a Western Union agency in the United States.

 Comparing the different money transfer companies, determine the ones that offer you the best services according to the money delivery options, the speed of that delivery, the exchange rate and the rates.